Key insights
- A DCF model suggests UPS is undervalued while TSLA and CAT are overvalued. UPS trades ~30% below intrinsic value, while over half of TSLA's price is attributed to speculation. CAT also has a significant speculative component despite strong earnings. The analysis highlights valuation discrepancies within the industrial sector and emphasizes the role of future expectations in TSLA's valuation.
I built a workflow that pulls data from SEC 10-K / 10-Q filings and runs a DCF model to estimate intrinsic value.
Originally this was just for myself — I got tired of rebuilding spreadsheets every time I wanted to sanity-check whether a stock price was actually supported by fundamentals.
I ran it across the names currently in my model and a few stood out.
Most fundamentally backed right now:
|Ticker|Company|Beer Score|Key Insight| |:-|:-|:-|:-| |UPS|United Parcel Service|100|Trading ~30% below intrinsic value| |O|Realty Income|82|Strong yield + near fair value| |PEP|PepsiCo|90|Defensive, well-supported by cash flow| |HON|Honeywell|86|Industrial with solid earnings backing| |ABT|Abbott Laboratories|100|Healthcare name trading near fair value|
Names where my DCF shows a large gap between price and fundamentals:
|Ticker|Company|Beer Score|Speculation| |:-|:-|:-|:-| |TSLA|Tesla|45|~55% of price is speculation| |PLTR|Palantir|14|Large premium vs current fundamentals| |CAT|Caterpillar|49|~51% speculation despite strong earnings|
Detailed examples:
TSLA — ~$368 market price vs ~$164 intrinsic value. P/E of ~344x with $4.4B free cash flow on $96.8B revenue. Great company, but over half the current price depends on future expectations rather than current earnings power.
UPS — ~$96 market price vs ~$136 intrinsic value. P/E of ~14.6x with $9.2B in free cash flow. One of the few large caps where price sits well below the DCF estimate right now.
CAT — ~$681 market price vs ~$335 intrinsic value. $9.8B in free cash flow on $67.1B revenue — strong fundamentals, but the stock has run up enough that roughly half the price is now speculation. Not every "boring industrial" is cheap.
What stood out:
- Industrials are mixed, not uniformly cheap. UPS looks undervalued but CAT screens expensive despite strong cash flows. 2. TSLA is still a story stock. The business is real, but valuation is still driven heavily by expectations. 3. Defensive names are quietly stable. PEP, HON, and ABT are much closer to fair value than most high-growth names.
Method:
- SEC filings (10-K / 10-Q) from EDGAR * Discounted Cash Flow (DCF) * 5-year growth assumptions * Sector-based WACC (~8–11%) * Terminal growth ~2.5–3%
The output is a simple ratio: how much of the stock price is backed by fundamentals vs how much depends on expectations.
I put the tool online for free if anyone wants to check specific tickers: justthebeer.com
The naming is just a metaphor — "beer" = fundamental value, "foam" = speculation premium.
Not investment advice. DCF is sensitive to assumptions — I'm more interested in whether the direction makes sense than treating these as precise price targets.
Happy to share assumptions or debate any of these.